For all the talk about the importance of supply chain issues during and after the pandemic, there hasn’t been much headway made in addressing the systemic challenges that will result in long-lasting change, a top trade association executive said.
Tom Madrecki, vice president of supply chain for the Consumer Brands Association, which represents major consumer goods companies, said that while investments are being made in semiconductors and other targeted industries, the United States is not making the type of progress needed to improve supply chain performance or competitiveness.
In a fireside chat on Wednesday during FreightWaves’ Global Supply Chain Week, Madrecki said concerns about a shortage of commercial truck drivers and declining railroad performance continue to get discussed only on the margins. Rail service garnered much attention late last year as labor and management hurtled toward a strike, but nothing was mentioned about the prolonged state of inadequate rail service, he said.
Meanwhile, there is still no body of government oversight to coordinate the many moving parts of the nation’s supply chain, Madrecki said.
However, with a new Congress comes a fresh start of approaching, and hopefully resolving, key problems, Madrecki said. Emerging from the new mindset is the Safer Highways and Increased Performance for Interstate Trucking (SHIP IT) Act. The legislation, introduced by Reps. Dustin Johnson, R-S.D., and Jim Costa, D-Calif., modernizes the authority for certain vehicle waivers during emergencies, allowing waivers in response to disease and supply chain emergencies. The bill also allows truck drivers to apply for Workforce Innovation and Opportunity Act grants.
The legislation takes all of the good individual ideas about trucking and consolidates them into a single piece of legislation, Madrecki said. “It’s tangible. It’s not like taking money and setting it on fire.”
One key issue in the bill will be to determine how much authority and flexibility the Federal Motor Carrier Safety Administration should have in granting emergency truck operating waivers and taking other critical rulemaking steps during emergency situations, said Madrecki, noting that Congress should ensure that FMCSA has the proper tools to launch emergency rulemaking without taking away the flexibility of governors to take action at the state level.
“We want to make sure the government has the flexibility to respond,” Madrecki said.
In addition, the Congressional Supply Chain Caucus, created during the pandemic, was relaunched in late January with new faces to take a holistic view of supply chain problems. Taken as a whole, there will be a “real opportunity in this Congress to tackle issues” that can have a material impact on supply chain competitiveness, he said.
Another heartening trend is the White House’s strong engagement in supply chain issues. “How many times did the president say the words ‘supply chain’ in the State of the Union?” Madrecki asked.
Biden’s comments and the administration’s actions the past two years “affirm that supply chain issues are a paramount concern,” he said. “It’s an issue we can wrap our arms around.”
One of the biggest challenges for Congress and the White House is to create durable linkages between trade and supply chain competitiveness, said Madrecki. “There isn’t a full-fledged tie back from trade to supply chains.”
Trade, he said, “is not a four-letter word. We should be saying it more and doing it more.”
Ralph
The supply chain issue is easy to solve: Pay more! I had to close my company due to low rates. Stop saying there’s a shortage of drivers, we’re here but we won’t move cheap freight.